Leumi Bank, the second-largest bank in Israel in terms of assets, concluded an agreement on Monday to take over 95% in Eurom Bank from Kolal, with the contract worth 41.7 million dollars, Eurom Bank''s chairman of the board, Benesh Avital stated yesterday.
The agreement says that Kolal will stand to get additional compensation in five years, the value of which will be set in line with the profitability of the bank. Furthermore, once the approvals from the Romanian and Israeli authorities have been received, the shares in Eurom Bank will be delisted from the domestic capital market. The agreement stipulates that six months after the closure of the deal, Leumi will put out a tender offer to obtain the shares still held by the other shareholders.
"Four years after the takeover of the controlling interests, when Eurom Bank was in a very difficult situation, we have managed to bring it back on track and have a positive financial situation. The bank has reached a maturity phase and, with Leumi becoming a shareholder, Eurom Bank will enter a new stage of development," stated Fredy Robinson, the representative of the majority shareholder, Kolal, a company controlled by Israeli investors and registered in the Netherlands.
Robinson said that Eurom Bank was a small bank and needed a strong partner in order to cope on the domestic market. "The price played an important part in the negotiation process, but we also looked for a strong partner, to support the development of the bank over the next few years," Robinson explained.
Daniel Tsidon, the head of the Strategy and International Business Development Department of Leumi Bank said that the takeover of Eurom Bank was mainly prompted by Romania''s economic growth prospects.
"On the other hand, Leumi''s strategy targets the expansion of our presence in the Central and Eastern European states and our entry onto the Romanian market is the first step," Tsidon stated.
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